Vanguard Magazine

32 FEBRUARY/MARCH 2019 www.vanguardcanada.com A version of BAE Systems' City-class Type 26 ASW frigate, now under construction for the British Royal Navy, will be acquired under Australia's Future Frigate Project. (BAE Systems) Shipbuilding and 2.5 years behind schedule. The proj- ect largely enjoyed political support from across the spectrum as it created "jobs in politically sensitive regions" and, second- arily, it gave the RAN access to local exper- tise in maintenance and upgrades. Aware that the country would need to re- place its Anzac frigates and Collins subma- rines in the near future, the Department of Defence (DOD) commissioned the RAND Corporation to outline what the country's next steps should be. The report provided several options, including continuing the momentum of the AWDs and build do- mestically; building hull overseas and outfit in Australia (the Canberra class approach); and buying an entire class of vessels over- seas. The report eventually settled on the first option but with the caveat that Can- berra pursue a multi-decade, continuous shipbuilding program. RAND reasoned that even with a 30 per cent to 40 per cent premium for building foreign designs do- mestically, Australia could drop this figure with steady production, a productive work- force and technology transfers. The Solution and Early Success The RAND recommendations were in- corporated into the 2016 Defence White Paper. The white paper promised three continuous builds equating to almost A$90 billion for the Naval Shipbuilding Plan. Of the builds, one is for smaller ves- sels including A$3 billion for 12 Offshore Patrol Vessels and A$335 million for 21 Guardian-class patrol boats – the latter of which are to be transferred to Pacific island countries via a regional security initiative. The biggest builds are A$50 billion for 12 future submarines and A$35 billion for nine future frigates. Another A$1 billion has been allocated for shipyard upgrades and infrastructure. The NSP's goal is to create a sustainable shipbuilding sector and avoid the boom-and-bust cycles of the past; it is, in short, to turn Australia from a "ship purchaser to a ship producer". Despite the emphasis on the national scope, the brunt of the construction work will take place at two locations, the gov- ernment-owned ASC Pty Ltd yards in Os- borne, South Australia and the Henderson Maritime Precinct, a common-user facility owned by the state of Western Australia, near Perth. Canberra has mandated that off-the-shelf, proven designs be used for its new vessels and that "the technology, intellectual prop- erty, business processes and workplace cul- tures" be transferred to Australia to ensure that a "sovereign" naval shipbuilding base takes root. This transfer of knowledge and technology is seen as vital to ensuring that the future continuous builds are possible and a response to past mistakes. The future frigate program, which will replace the eight Anzac frigates procured in the 1990s and early 2000s, announced a successful design in June 2018, BAE's Type-26, the same design selected for Canada's CSC project. Last, German firm Lürssen received the OPV contract in Jan- uary 2018 and has already begun work on the first two ships at Osborne Naval Ship- yard before moving production on the re- maining 10 ships in 2020 to Henderson Maritime Precinct. The Challenges Despite being the younger of the two countries' shipbuilding strategies, the NSP has already encountered problems and criticisms, key of which was a 2018 re- port by the Australian National Audit Of- fice (ANAO) – the equivalent of Canada's Office of the Auditor General. The report characterized the NSP as an "extreme risk". The ANAO noted that the DOD had not updated its cost assumptions from the 2016 white paper on either the subma- rines or frigates even though recent gov- ernment decisions on building the Barra- cuda subs in Australia and equipping the new frigates and the Aegis BMD system will entail significant design changes. The feasibility of the NSP remains a concern as well. The plan, for instance, does not provide for in-service support costs nor is it clear that domestic indus- try will have access to the design informa- tion required for upgrading the combat and sensor systems, thereby repeating the problems of the Collins class. Others have pointed out that Australia's domes- tic steel industry lacks the capacity to pro- duce the 1,800 tonnes of steel needed for each submarine, further contributing to cost escalation. Doubts persist on whether Australia should even be in the business of building large platforms and resources better spent on supporting the country's high-tech, niche defence suppliers. It was telling that in 2016 a A$1 billion contract for two new supply ships was placed with Spanish firm Navantia on the grounds that they could be delivered 12-24 months ear- lier and cheaper than if built domestically. Problems have also emerged in advanc- ing the submarine project. Negotiations on a strategic partnering agreement with the French state-owned majority firm Na- val Group have hit a roadblock over Aus- tralia's requirements for technology trans- fer, intellectual property and warranties. The current impasse has attracted partisan attacks with the opposition Labour Party claiming, should it win government in 2019, that it may review the project if the dispute is not resolved. Finally, allegations of regionalism have not dissipated either. A Labour-led gov- ernment in Victoria, whose Williamstown Dockyard outfitted the A$3 billion Can- berra-class amphibious assault helicopter carriers, accused the prime minister in 2017 of snubbing the state from NSP con- tracts in favour of garnering votes in South Australia and Western Australia. The pre- mier demanded that Victoria get its "fair share" of the contracts. Analysis: "Go Big or Go Home?" Canada and Australia are still in the early stages of their national shipbuilding plans. Despite challenges in start-up costs, hiring and establishing shipyard infrastructure, both countries have started to see progress made; however, certain themes have also emerged reflecting the challenges of effec- tive long-term implementation. For one, the rational approach to naval shipbuild- ing is not devoid of procurement poli- tics and regionalism. Determining which province or state will be home to billions in contracts over many years remains a ze- ro-sum game no matter how arms-length the process of yard selection. The clamour

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